Options trade plan for SPX crash.
I think if there was a crash to be coming in the SPX the warning signs will come this month. They'd be in the form of price downtrending over the next few weeks, breaking under the previous supports and then entering into a shallow rally. If this price action happens, I think there's a lot of value shorting into that rally. I plan to finance deep OTM puts by selling ATM call credit spreads. Giving me the possibility of a jackpot if the move happens and still a fair chance to breakeven if the market is just moderately weak.
My profit target is 2830 and I will come into the market as a put seller if we hit 2700 and 2600. From here I expect a theta market for somewhere close to 6 months, during this time I'll buy stock and sell covered calls against them and as we get later into the range I'll start to look at buying call options.
My profit target is 2830 and I will come into the market as a put seller if we hit 2700 and 2600. From here I expect a theta market for somewhere close to 6 months, during this time I'll buy stock and sell covered calls against them and as we get later into the range I'll start to look at buying call options.
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